InsiderFlow › Glossary › What are small cap stocks?
Small caps are listed companies of modest size, usually under $2 billion in market value: riskier, but with more room to grow.
A small cap can grow tenfold in a few years — nearly impossible for a trillion-dollar giant — but it can also fail or stay forgotten for decades. They're less covered by analysts, hence less efficient: that's where active managers hunt for bargains.
Historically small caps have outperformed large caps over very long horizons (the "size premium"), at the cost of much greater volatility and drawdowns.
On InsiderFlow these concepts come alive on real data: what big funds and insiders are buying, explained every day.
No: the size premium comes and goes over decades. Since 2010, mega-cap tech has dominated.
Through dedicated ETFs (e.g. Russell 2000) that diversify across hundreds of names.